[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2952 Introduced in House (IH)]

  2d Session
                                H. R. 2952

 To amend the Internal Revenue Code of 1986 and title II of the Social 
    Security Act to reduce social security taxes, to reduce old-age 
 insurance benefits by a corresponding amount, and to provide for the 
establishment of individual social security retirement accounts funded 
by payroll deductions and employer contributions equal to the amount of 
                           the tax reduction.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 1, 1996

Mr. Porter (for himself, Mr. Shays, Mr. Calvert, Mr. Manzullo, and Mr. 
    Petri) introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committee on 
Economic and Educational Opportunities, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 and title II of the Social 
    Security Act to reduce social security taxes, to reduce old-age 
 insurance benefits by a corresponding amount, and to provide for the 
establishment of individual social security retirement accounts funded 
by payroll deductions and employer contributions equal to the amount of 
                           the tax reduction.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Individual Social Security 
Retirement Account Act of 1995''.

SEC. 2. REDUCTION OF SOCIAL SECURITY TAXES.

    (a) Employment Taxes.--
            (1) Tax on employees.--Subsection (a) of section 3101 of 
        the Internal Revenue Code of 1986 (relating to OASDI tax on 
        employees) is amended by adding at the end, after and below the 
        table, the following new sentence:
``The rate of tax specified in the preceding table for any calendar 
year shall be reduced by the authorized tax reduction for such calendar 
year determined under section 3128.''
            (2) Tax on employers.--Subsection (a) of section 3111 of 
        such Code (relating to OASDI tax on employers) is amended by 
        adding at the end, after and below the table, the following new 
        sentence:
``The rate of tax specified in the preceding table for any calendar 
year shall be reduced by the authorized tax reduction for such calendar 
year determined under section 3128.''
            (3) Authorized tax reduction.--
                    (A) In general.--Subchapter C of chapter 21 of such 
                Code is amended--
                            (i) by redesignating section 3128 as 
                        section 3129; and
                            (ii) by inserting after section 3127 the 
                        following new section:

``SEC. 3128. AUTHORIZED TAX REDUCTION.

    ``(a) In General.--Except as provided in subsection (b), for 
purposes of sections 3101(a) and 3111(a), the term `authorized tax 
reduction' for any calendar year means 50 percent of the sum of--
            ``(1) the excess of--
                    ``(A) the total unadjusted OASI tax rate for such 
                calendar year (determined under subsection (c)), over
                    ``(B) the adjusted cost rate (determined under 
                subsection (d)) for such calendar year,
        plus
            ``(2) the value of the projected receipts for such calendar 
        year of the Federal Old-Age and Survivors Insurance Trust Fund 
        constituting amounts appropriated to such Trust Fund equivalent 
        to tax liabilities under chapter 1 of the Internal Revenue Code 
        of 1986 attributable to the application of sections 86 and 
        871(a)(3) of such Code to payments from such Trust Fund, 
        expressed as a percentage of the sum of the projected total 
        wages to be paid in such calendar year and self-employment 
        income to be derived in such calendar year.
    ``(b) Disregard of Deminimis Reductions.--In any case in which the 
authorized tax reduction (as defined in subsection (a)) for any 
calendar year does not exceed 0.2 percent, such authorized tax 
reduction shall be deemed to be 0 percent.
    ``(c) Total Unadjusted OASI Tax Rate.--
            ``(1) In general.--Not later than November 1 of each 
        calendar year, the Commissioner of Social Security shall 
        determine and publish in the Federal Register the total 
        unadjusted OASI tax rate for the following calendar year. For 
        purposes of this section, the term `total unadjusted OASI tax 
        rate' for a calendar year means the product derived by 
        multiplying--
                    ``(A) the sum of the rates specified for such 
                calendar year under sections 3101(a) and 3111(a) 
                (determined without regard to the last sentence 
                thereof), by
                    ``(B) the OASI appropriation percentage for such 
                calendar year,
        rounded, if not a multiple of 0.01 percent, to the nearest 
        multiple of 0.01 percent.
            ``(2) OASI appropriation percentage.--For purposes of this 
        subsection, the term `OASI appropriation percentage' for any 
        calendar year means the quotient (expressed as a percentage) 
        derived by dividing--
                    ``(A) the total amount projected to be appropriated 
                to the Federal Old-Age and Survivors Insurance Trust 
                Fund under section 201(a) of the Social Security Act 
                for the fiscal year beginning October 1 preceding such 
                calendar year, by
                    ``(B) the total amount projected to be appropriated 
                to such Trust Fund and the Federal Disability Insurance 
                Trust Fund under section 201 of such Act for such 
                fiscal year,
        rounded, if not a multiple of 1 percent, to the nearest 
        multiple of 1 percent.
    ``(d) Adjusted Cost Rate.--
            ``(1) In general.--Not later than November 1 of each 
        calendar year, the Commissioner of Social Security shall 
        determine and publish in the Federal Register the adjusted cost 
        rate for the following calendar year. For purposes of this 
        section, the term `adjusted cost rate' for any calendar year 
        means the quotient (expressed as a percentage) derived by 
        dividing--
                    ``(A) the adjusted projected OASI costs for such 
                calendar year, by
                    ``(B) the sum of the projected total wages to be 
                paid in such calendar year and projected self-
                employment income to be derived in such calendar year.
            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) Adjusted projected oasi costs.--The term 
                `adjusted projected OASI costs' for any calendar year 
                means the sum of--
                            ``(i) the projected amount of annual 
                        outlays from the Federal Old-Age and Survivors 
                        Insurance Trust Fund for such calendar year, 
                        and
                            ``(ii) the contingency reserve adjustment 
                        for such calendar year.
                    ``(B) Contingency reserve adjustment.--The term 
                `contingency reserve adjustment' for any calendar year 
                means the excess of--
                            ``(i) 150 percent of the projected annual 
                        outlays from the Federal Old-Age and Survivors 
                        Insurance Trust Fund for such calendar year, 
                        determined as of January 1 of such year, over
                            ``(ii) the projected Trust Fund contingency 
                        reserve percentage, determined as of such date, 
                        of such projected annual outlays.
                    ``(C) Trust fund contingency reserve percentage.--
                The term `Trust Fund contingency reserve percentage' as 
                of any date means the quotient (expressed as a 
                percentage) derived by dividing--
                            ``(i) the balance of the Federal Old-Age 
                        and Survivors Insurance Trust Fund as of such 
                        date, by
                            ``(ii) the projected annual outlays from 
                        the Trust Fund for the year commencing on such 
                        date,
                rounded, if not a multiple of 1 percent, to the nearest 
                multiple of 1 percent.''
                    (B) Clerical amendment.--The table of sections for 
                subchapter C of chapter 21 of such Code is amended by 
                striking the item relating to section 3128 and 
                inserting the following new items:

``Sec. 3128. Authorized tax reduction.
``Sec. 3129. Short title.''
    (b) Self-Employment Taxes.--
            (1) In general.--Subsection (a) of section 1401 of such 
        Code (relating to OASDI tax on self-employment income) is 
        amended by adding at the end, after and below the table, the 
        following new sentence:
``The rate of tax specified in the preceding table for any taxable year 
shall be reduced by the authorized tax reduction, determined under 
section 1403, for the calendar year in which such taxable year 
commences.''
            (2) Authorized tax reduction.--
                    (A) In general.--Chapter 2 of such Code is 
                amended--
                            (i) by redesignating section 1403 as 
                        section 1404; and
                            (ii) by inserting after section 1402 the 
                        following new section:

``SEC. 1403. AUTHORIZED TAX REDUCTION.

    ``(a) In General.--Except as provided in subsection (b), for 
purposes of sections 1401(a), the term `authorized tax reduction' for 
any calendar year means the sum of--
            ``(1) the excess of--
                    ``(A) the total unadjusted OASI tax rate for such 
                calendar year (determined under section 3128(c)), over
                    ``(B) the adjusted cost rate for such calendar year 
                (determined under section 3128(d)),
        plus
            ``(2) the value of the projected receipts for such calendar 
        year of the Federal Old-Age and Survivors Insurance Trust Fund 
        constituting amounts appropriated to such Trust Fund equivalent 
        to tax liabilities under chapter 1 of the Internal Revenue Code 
        of 1986 attributable to the application of sections 86 and 
        871(a)(3) of such Code to payments from such Trust Fund, 
        expressed as a percentage of the sum of the projected total 
        wages to be paid in such calendar year and the projected self-
        employment income to be derived in such calendar year.
    ``(b) Disregard of Deminimis Reductions.--In any case in which the 
authorized tax reduction (as defined in subsection (a)) for any year 
does not exceed 0.4 percent, such authorized tax reduction shall be 
deemed to be 0 percent.''
                    (B) Clerical amendment.--The table of sections for 
                chapter 2 of such Code is amended by striking the item 
                relating to section 1403 and inserting the following 
                new items:

``Sec. 1403. Authorized tax reduction.
``Sec. 1404. Miscellaneous provisions.''
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to remuneration paid after December 31, 1996, and 
with respect to earnings from self-employment attributable to taxable 
years beginning after such date.

SEC. 3. CORRESPONDING ADJUSTMENT TO OLD-AGE INSURANCE BENEFITS.

    (a) In General.--Section 202(a) of the Social Security Act (42 
U.S.C. 202(a)) is amended--
            (1) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), respectively;
            (2) by redesignating paragraphs (1), (2), and (3) as 
        subparagraphs (A), (B), and (C), respectively;
            (3) in clause (i) (as redesignated), by striking 
        ``paragraphs (1), (2), and (3)'' and inserting ``subparagraphs 
        (A), (B), and (C)'';
            (4) in clause (ii) (as redesignated), by striking 
        ``paragraphs (1) and (2)'' and inserting ``subparagraphs (A) 
        and (B)'', and by striking ``paragraph (3)'' and inserting 
        ``subparagraph (C)'';
            (5) by striking ``(a) Every'' and inserting ``(a)(1) 
        Every'';
            (6) in the matter following clause (ii) (as redesignated), 
        by striking ``subsection (q) and subsection (w)'' and inserting 
        ``paragraph (2) and subsections (q) and (w)''; and
            (7) by adding at the end the following new paragraph:
    ``(2)(A) An individual's monthly benefit determined under paragraph 
(1) shall be reduced by the authorized benefit reduction for such 
individual. The reduction in an individual's benefit under this 
paragraph shall be applied after any reduction or deduction otherwise 
applicable under this title to benefits based on such individual's 
wages and self-employment income.
    ``(B) For purposes of this paragraph, the term `authorized benefit 
reduction' for an individual means one-twelfth of an annuity, stated as 
an annual amount--
            ``(i) which has the actuarial present value (determined as 
        of January 1 of the calendar year in which such individual 
        attains retirement age (as defined in section 216(l)) of the 
        aggregate of all reductions in taxes under the last sentence of 
        sections 1401(a), 3101(a), and 3111(a) of the Internal Revenue 
        Code of 1986 (including reductions in taxes under sections 
        3201(a) and 3221(a) of such Code) with respect to such 
        individual's wages (including compensation referred to in such 
        sections 3201(a) and 3221(a)) paid, and self-employment income 
        derived, prior to such month, rounded, if not a multiple of $1, 
        to the nearest multiple of $1,
            ``(ii) which shall be increased by the Commissioner in 
        accordance with subparagraph (C), and
            ``(iii) which shall be adjusted by the Commissioner 
        annually for increases in the cost of living, in accordance 
        with regulations prescribed by the Commissioner providing for 
        adjustment procedures similar to the procedures used to adjust 
        benefit amounts under section 215(i)(2)(A).
    ``(C) With respect to all individuals who attain age 62 in any 
calendar year and who become entitled to old-age insurance benefits in 
or after such year, the Commissioner of Social Security may increase 
the authorized benefit reductions for such individuals under 
subparagraph (B) to the extent necessary to compensate appropriately 
for the value of amounts credited to the individual social security 
retirement accounts of individuals who would have attained age 62 in 
such calendar year but died before attaining such age. Any authorized 
benefit reduction so adjusted which is not a multiple of $1 shall be 
rounded to the nearest multiple of $1.
    ``(D) In deriving the authorized benefit reduction under this 
paragraph, the Commissioner of Social Security shall utilize generally 
accepted actuarial assumptions which shall be prescribed in regulations 
of the Commissioner, except that--
            ``(i) determinations shall be made on a gender-neutral 
        basis,
            ``(ii) for purposes of determing the actuarial present 
        value referred to in subparagraph (B)(i), the Commissioner 
        shall assume, for the cohort of old-age insurance beneficiaries 
        born during each calendar year, a discount rate equal to the 
        implicit rate of return for all individuals in such cohort 
        which would be represented by their old-age insurance benefits 
        if reductions under this paragraph were not applied, determined 
        solely on the basis of total unadjusted OASI tax rates (as 
        defined in section 3128(c)(1) of the Internal Revenue Code of 
        1986) in effect from year to year, and
            ``(iii) interest with respect to the annuity shall be 
        computed for any month at the rate used for such month under 
        section 201(d), adjusted for projected inflation.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to months after December 1996.

SEC. 4. INDIVIDUAL SOCIAL SECURITY RETIREMENT ACCOUNTS FUNDED BY SOCIAL 
              SECURITY PAYROLL DEDUCTION PLANS.

    (a) In General.--Title II of the Social Security Act is amended--
            (1) by inserting before section 201 the following:

                    ``Part A--Insurance Benefits'';

        and
            (2) by adding at the end the following new part:

                ``Part B--Individual Retirement Program

               ``social security payroll deduction plans

    ``Sec. 251. (a) In General.--Each person who is a covered employer 
for any calendar year shall have in effect throughout such calendar 
year a social security payroll deduction plan for such person's 
eligible employees.
    ``(b) Requirements.--For purposes of this part, the term `social 
security payroll deduction plan' means a written plan of a covered 
employer if--
            ``(1) under such plan, the prescribed social security 
        employee contribution is deducted from each eligible employee's 
        wages and paid to an individual social security retirement 
        account of such employee designated in accordance with section 
        252,
            ``(2) under such plan, the covered employer pays the amount 
        so deducted to the designated individual social security 
        retirement account within 10 business days after the payment of 
        the wages from which the amount was deducted,
            ``(3) under such plan, the covered employer pays to the 
        individual social security retirement account, together with 
        the contribution paid pursuant to paragraph (2), the prescribed 
        social security employer contribution with respect to the 
        eligible employee, and
            ``(4) the employer receives no compensation for the cost of 
        administering such plan.
    ``(c) Amount Deducted May Be Accumulated by Employer in Certain 
Cases.--If, under the terms of an individual social security retirement 
account selected under section 252, contributions below a specified 
amount will not be accepted, the requirements of subsection (b)(2) 
shall be treated as met if amounts deducted from the wages of an 
eligible employee are accumulated by the covered employer and paid to 
such plan not later than 10 business days after the first day on which 
the accumulated amount exceeds such specified amount.

    ``designation of individual social security retirement accounts

    ``Sec. 252. (a) In General.--Except as provided in subsection (b), 
the individual social security retirement account to which 
contributions with respect to any eligible employee are required to be 
paid under section 251 shall be such an account designated by such 
employee to such employer not later than 10 business days after the 
date on which such employee becomes an eligible employee of such 
employer. Any such designation shall be made in such form and manner as 
may be prescribed in regulations of the Commissioner of Social 
Security.
    ``(b) Designation in Absence of Timely Designation by Employee.--In 
any case in which no timely designation of the individual social 
security retirement account is made, the covered employer shall 
designate such account in accordance with regulations of the 
Commissioner.
    ``(c) Subsequent Designation of Other Accounts.--The Commissioner 
shall provide by regulation for subsequent designation of other 
individual social security retirement accounts of an eligible employee 
in lieu of or in addition to accounts previously designated under this 
section.

                      ``self-employed individuals

    ``Sec. 253. (a) In General.--Not later than 30 days after the close 
of any taxable year for which there is imposed a tax under section 
1401(a) of the Internal Revenue Code of 1986 on the self-employment 
income of an individual, such individual shall pay to an individual 
social security retirement account designated by such individual the 
prescribed social security self-employment contribution with respect to 
such individual for such taxable year.
    ``(b) Designation of Account.--The designation of an individual 
social security retirement account for payment of prescribed social 
security self-employment contributions shall be made in such form and 
manner as may be prescribed in regulations of the Commissioner of 
Social Security.

                             ``definitions

    ``Sec. 254. For purposes of this part--
            ``(1) Individual social security retirement account.--The 
        term `individual social security retirement account' means any 
        individual retirement account (as defined in section 408(a) of 
        the Internal Revenue Code of 1986) which is administered or 
        issued by a bank (as defined in section 408(n) of such Code) 
        and which meets the requirements of section 408A of such Code.
            ``(2) Covered employer.--The term `covered employer' means, 
        for any calendar year, any person on whom an excise tax is 
        imposed under section 3111 or 3221 of the Internal Revenue Code 
        of 1986 with respect to having an individual in his employ to 
        whom wages were paid by such person during such calendar year.
            ``(3) Eligible employee.--The term `eligible employee' 
        means, in connection with any person who is a covered employer 
        for any calendar year, any individual with respect to whose 
        employment by such employer during such calendar year there is 
        imposed an excise tax under section 3111 or 3221 of the 
        Internal Revenue Code of 1986.
            ``(4) Prescribed social security employee contribution.--
        The term `prescribed social security employee contribution' 
        means, with respect to any eligible employee of a covered 
        employer, an amount equal to the product derived by 
        multiplying--
                    ``(A) the wages received by such employee with 
                respect to employment by such employer, by
                    ``(B) the rate of the authorized tax reduction 
                specified in section 3128(a) of the Internal Revenue 
                Code of 1986,
        rounded, if not a multiple of $1, to the nearest multiple of 
        $1.
            ``(5) Prescribed social security employer contribution.--
        The term `prescribed social security employer contribution' 
        means, with respect to a covered employer of any eligible 
        employee, an amount equal to the product derived by 
        multiplying--
                    ``(A) the wages paid by such employer to such 
                employee with respect to employment of such employee, 
                by
                    ``(B) the rate of the authorized tax reduction 
                specified in section 3128(a) of the Internal Revenue 
                Code of 1986,
        rounded, if not a multiple of $1, to the nearest multiple of 
        $1.
            ``(6) Prescribed social security self- employment 
        contribution.--The term `prescribed social security self-
        employment contribution' means, with respect to the self-
        employment income of an individual for any taxable year, an 
        amount equal to the product derived by multiplying--
                    ``(A) the the amount of such self-employment income 
                for such taxable year, by
                    ``(B) the rate of the authorized tax reduction 
                specified in section 1403(a) of the Internal Revenue 
                Code of 1986,
        rounded, if not a multiple of $1, to the nearest multiple of 
        $1.
            ``(7) Business day.--The term `business day' means any day 
        other than a Saturday, Sunday, or legal holiday in the area 
        involved.
            ``(8) Wages.--In the case of a covered employer referred to 
        in section 3221 of the Internal Revenue Code of 1986, the term 
        `wages' includes compensation referred to in such section 3221.

                              ``penalties

    ``Sec. 255. (a) Failure To Establish Social Security Payroll 
Deduction Plan.--Any covered employer who fails to meet the 
requirements of section 251 for any calendar year shall be subject to a 
civil penalty of not to exceed the greater of--
            ``(1) $50,000, or
            ``(2) $1,000 for each eligible employee of such employer as 
        of the beginning of such calendar year.
    ``(b) Failure To Make Deductions Required Under Plan.--Any covered 
employer who fails to timely deduct in full the amount from the wages 
of an eligible employee required under an applicable social security 
payroll deduction plan shall be subject to a civil penalty of not to 
exceed $50 for each such failure.
    ``(c) Failure To Pay Deducted Wages to Individual Social Security 
Retirement Account.--If an amount deducted from the wages of an 
eligible employee under a social security payroll deduction plan is not 
timely paid in full to the designated individual social security 
retirement account in accordance with section 251--
            ``(1) the covered employer failing to make such payment 
        shall be subject to a civil penalty of not to exceed 20 percent 
        of the unpaid amount, and
            ``(2) shall be liable to the eligible employee for interest 
        on the unpaid amount at a rate equal to 133 percent of the 
        Federal short-term rate under section 1274(d)(1) of the 
        Internal Revenue Code of 1986, calculated from the last day by 
        which such amount was required to be so paid to the date on 
        which such amount is paid into the designated individual social 
        security retirement account.
    ``(d) Failure To Pay Prescribed Social Security Self-Employment 
Contributions to Individual Social Security Retirement Account.--Any 
individual failing to timely pay in full a prescribed social security 
self-employment contribution to a designated individual social security 
retirement account as required under section 253 shall be subject to a 
civil penalty of not to exceed 20 percent of the unpaid amount, plus 
interest on the unpaid amount at a rate equal to 133 percent of the 
Federal short-term rate under section 1274(d)(1) of the Internal 
Revenue Code of 1986, calculated from the last day by which such amount 
was required to be so paid to the date on which such amount is paid 
into the designated individual social security retirement account.
    ``(e) Rules for Application of Section.--
            ``(1) Penalties assessed by commissioner of social 
        security.--Any civil penalty assessed by this section shall be 
        imposed by the Commissioner of Social Security and collected in 
        a civil action.
            ``(2) Compromises.--The Commissioner may compromise the 
        amount of any civil penalty imposed by this section.
            ``(3) Authority to waive penalty in certain cases.--The 
        Commissioner may waive the application of this section with 
        respect to any failure if the Commissioner determines that such 
        failure is due to reasonable cause and not to intentional 
        disregard of rules and regulations.''.
    (b) Amounts Deducted To Be Shown on W-2 Statements.--Subsection (a) 
of section 6051 of the Internal Revenue Code of 1986 (relating to 
receipts for employees) is amended--
            (1) by striking ``and'' at the end of paragraph (8),
            (2) by striking the period at the end of paragraph (9) and 
        inserting ``, and'', and
            (3) by inserting after paragraph (9) the following new 
        paragraph:
            ``(10) the total amount deducted from the employee's wages 
        under a social security payroll deduction plan established 
        under part B of title II of the Social Security Act.''
    (c) Exemption From ERISA Requirements.--Subsection (b) of section 4 
of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1003(b)) is amended--
            (1) by striking ``or'' at the end of paragraph (4);
            (2) by striking the period at the end of paragraph (5) and 
        inserting ``; or''; and
            (3) by adding at the end the following new paragraph:
            ``(6) such plan is a social security payroll deduction plan 
        established under part B of title II of the Social Security 
        Act.''.
    (d) Effective Date.--
            (1) In general.--The amendments made by subsection (a) 
        shall apply with respect to wages paid in calendar years 
        beginning on or after January 1, 1997.
            (2) Transitional rule.--Notwithstanding section 252(a) of 
        the Social Security Act (as added by this Act), the initial 
        designations of individual social security retirement accounts 
        with respect to eligible employees employed by covered 
        employers as of January 1, 1997, pursuant to such section may 
        be made at any time not later than January 15, 1997.

SEC. 5. TAX TREATMENT OF INDIVIDUAL SOCIAL SECURITY RETIREMENT 
              ACCOUNTS.

    (a) In General.--Subpart A of part I of subchapter D of chapter 1 
of the Internal Revenue Code of 1986 (relating to pension, profit-
sharing, stock bonus plans, etc.) is amended by inserting after section 
408 the following new section:

``SEC. 408A. INDIVIDUAL SOCIAL SECURITY RETIREMENT ACCOUNTS.

    ``(a) General Rule.--Except as provided in this section, an 
individual social security retirement account shall be treated for 
purposes of this title in the same manner as an individual retirement 
plan.
    ``(b) Individual Social Security Retirement Account.--For purposes 
of this section, the term `individual social security retirement 
account' means an account established and administered in accordance 
with part B of title II of the Social Security Act (relating to 
individual retirement program).
    ``(c) Contribution Rules.--
            ``(1) No deduction allowed.--No deduction shall be allowed 
        under section 219 for a contribution to an individual social 
        security retirement account.
            ``(2) Contribution limit.--No amount, other than a 
        prescribed contribution under part B of title II of the Social 
        Security Act, may be accepted as a contribution to an 
        individual social security retirement account.
    ``(d) Treatment of Rollovers.--Section 408(d)(3)(A)(i) shall apply 
to any amount distributed from an individual social security retirement 
account only to the extent such amount is paid into another such 
account for the benefit of the individual for whom the account from 
which such amount is transferred was maintained.''
    (b) Clerical Amendment.--The table of sections for such subpart A 
is amended by inserting after the item relating to section 408 the 
following new item:

                              ``Sec. 408A. Individual social security 
                                        retirement accounts.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.

SEC. 6. SUNSET OF PROVISIONS UPON EQUALIZATION OF RECEIPTS AND 
              DISBURSEMENTS OF THE TRUST FUND.

    In any case in which the authorized tax reduction (as defined in 
section 3128 of the Internal Revenue Code of 1986, as amended by this 
Act) for any year is (or is deemed to be) 0 percent for each calendar 
year of any period of 3 consecutive calendar years commencing on or 
after January 1, 1997--
            (1) sections 2 and 3 and the amendments made thereby shall 
        cease to be effective with respect to remuneration paid after 
        such period and with respect to earnings from self-employment 
        attributable to taxable years beginning after such period,
            (2) effective with respect to such remuneration and such 
        earnings, the provisions amended by sections 2 and 3 shall read 
        as if the amendments made by this section had not been enacted, 
        and
            (3) section 251, subsections (a) and (b) of section 252, 
        and section 253 of the Social Security Act (added by this Act) 
        shall cease to be effective with respect to wages paid for 
        services rendered after such period, and self-employment income 
        derived after such period.
                                 <all>
HR 2952 IH----2